Tan Cheng Gay and Others v. Tan Choo Suan and Another

CACV 200/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 200 OF 2013

(ON APPEAL FROM HCMP NO 246 of 2013)

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J U D G M E N T

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Hon Poon J (giving the judgment of the Court of Appeal) :

A. INTRODUCTION

1.This appeal concerns the proper construction of Clause 2 of the Joint Will made by Mr Tan Kiam Toen (“the Deceased”) and his wife, Madam Ng Giok Oh (“Madam Ng”) dated 6 February 2008, which provided :

“我們謹此聲明這份平安囑書將管轄及處理我們名下所有（不論在世界任何地方）的財產。”

2.What divided the parties is the meaning of the words “名下”.  At the hearing before Deputy High Court Judge Chu, the plaintiffs contended that “名下” meant “under/or in the name” of somebody.  It only covered all assets held in the name of the Deceased or by him personally, excluding assets held on trust for him.  The 1^st defendant contended that “名下” embraced all assets beneficially belonging to the Deceased, including assets held on trust for him.  In the end, by a judgment handed down on 6 September 2013, the learned Judge ruled in favour of the 1^st defendant.

3.By a further ruling on costs, the Judge ordered the plaintiffs to pay the 1^st defendant costs, to be taxed on a party and party basis if not agreed.  She took the view that the plaintiffs commenced the present proceedings to serve their own personal interest, which is adverse to that of the Deceased’s estate.  She therefore rejected the plaintiffs’ submission that the parties’ costs, including theirs, should be borne by the estate.

4.The plaintiffs now appeal against both the Judge’s ruling on the construction issue and her costs order.

5.The background facts may be summarized as follows.

B. BACKGROUND FACTS

B1. The Deceased

6.The Deceased was born in the Mainland in about 1919.  He married Madam Ng in 1943.  They had 2 daughters (the 1^st defendant and the 3^rd plaintiff) and 3 sons (the 1^st, 2^nd and 4^th plaintiffs).

7.Coming from a humble background, the Deceased started from scratch and eventually through his diligence became a very wealthy man.  In 1961, he set up Afro-Asia Shipping Company (“AAS”) in Singapore, which traded in tin, tea, coffee, rice, rubber and cement.  AAS’s principal assets comprise of a commercial office building in Singapore and approximately 13.37% interest in EnGro Corporation Ltd (“EnGro”), a publicly listed company in Singapore. Through AAS, a loan of about S $17 million was made available for the purchase of a further 26.56% interest in EnGro through 70% shareholding of a Hong Kong company, Afro-Asia International Enterprises PTE Limited (“AAIE”).  The 70% shareholding of AAIE is embodied in 3.5 million shares, which are registered in the respective names of the 1^st defendant and the 3^rd plaintiff (“the Shares”) of 1.75 million each.  It is the 1^st defendant’s case that she and the 3^rd plaintiff hold the Shares on trust for their father.

B2. The 2006 Wills and the 2006 Undertaking

8.On 21 April 2006, the Father and the Mother had each made a will in Singapore (“2006 Will”) prepared by their lawyer there, and they both signed a joint statement (“Joint Statement”).  The 2006 Wills and the Joint Statement were in English and both the 1^st defendant and 3^rd plaintiff were named executrices.

9.Madam Ng’s 2006 Will covered all her properties moveable and immovable whatsoever and wheresoever situated.  In Clause 6, Madam Ng declared, among other things, that she had no assets which were held by her daughters or by any other person in trust for her; and that the shares in AAS which were registered under her name belonged absolutely to the 1^st defendant, and she had executed a trust deed in favour of the 1^st defendant accordingly.

10.The Deceased’s 2006 Will also covered all his properties moveable and immovable whatsoever and wheresoever situated, and essentially after payment of debts and expenses, his estate was divided as to 50% for Madam Ng, and the remaining 50% for his 5 children in equal shares of 10% each.  He further declared that he had no assets which were held by his daughters or by any other person in trust for him and that all the assets previously belonged to him or financed by him which were held by his daughters were not held in trust for him.

11.In the Joint Statement, the Deceased and Madam Ng stated that they had no assets which were held by their daughters or by any other person in trust for either or both of them; and that all the assets previously belonged to or financed by any or both of them which were currently held by their daughters were beneficially owned by their daughters and were not held in trust for any or both of them.

12.On 21 December 2006, the 1^st defendant and the 3^rd plaintiff, upon the Deceased’s request, wrote a joint letter addressed to their parents (“2006 Undertaking”).  In the 2006 Undertaking, they stated that although they were the beneficial owners of the Shares in AAIE (which in turn held 29,641,700 shares in EnGro), they undertook that in the event of the Deceased’s death, they would give part of the Shares to Madam Ng and their brothers in the manner stated therein, and further if AAIE were to be liquidated, they would give various shares in EnGro to Madam Ng and their brothers in the manner stated therein.

B3. The 2007 Wills

13.On 30 March 2007, the Deceased and Madam Ng each signed another will in Hong Kong prepared by Messrs Hastings, revoking all previous wills (“2007 Will”).  The 2007 Wills were written in Chinese.  They both appointed the 1^st defendant as the sole executrix.  The Deceased’s 2007 Will covered his assets described as “名下所有在香港以及其它任何地方的財產(包括動產及不動產)”. It further provided that, after payment of debts and expenses, the Deceased bequeathed all his residual assets to Madam Ng and if she did not survive him for 30 days, all his residual assets were to be donated to charities.  He stated therein that as his children had all been adequately provided for during his life time, they were not to receive anything from his residual assets.

B4. The Deceased’s statutory declaration

14.Subsequently on 31 January 2008, the Deceased made a statutory declaration.  It would appear from the oral evidence of the 1^st Defendant in the Singaporean proceedings that a deed of family arrangement (“DFA”) was attached to that statutory declaration.  As the Judge noted, the statutory declaration had not been adduced as evidence.  That being the case, we do not think anything pertaining to the construction issue should turn on the statutory declaration or the DFA attached to it.

B5. The Joint Will

15.As said, the Deceased and Madam Ng made the Joint Will, in Chinese, on 6 February 2008.  The Joint Will provided :

“（一）我們謹此撤銷所有我們在此日以前簽立的平安囑書和具平安囑書性質的文書，並聲明這份平安囑書是我們最後的平安囑書。

（二）我們謹此聲明這份平安囑書將管轄及處理我們名下所有（不論在世界任何地方）的財產。

（三）我們都是香港特別行政區永久居民，以香港為我們的居籍地。我們謹此聲明，這份平安囑書的解釋和執行，均須按照香港的法律處理。

（四）我們在此委託我們的女兒，陳慈萱(TAN Choo Suan)…作為我們這份平安囑書的唯一執行人及受託人（下稱我們的‘受託人’）。

（五）我們彼此間相互承諾假如我們之間其中一位先行辭世，在扣除所有必要開支（如償還債項，支付殮葬禮儀和辦理遺產承辦所需的費用及繳納政府稅項等）後，尚存的一方可以終身享有由先辭世的一方的財產所衍生的入息。

（六）當我們之間尚存的一方也都離世後，我們把我們雙方的財產全部交給我們的受託人，由她按照實際的情況和需要作出判斷，行使她的權力出讓、轉售、租賃、按揭、套現我們雙方的財產或其中的部份。我們的受託人也有權修訂、更改、取消上述行為，或將有關財產保留，維持現狀。但她無須為變賣或延遲變賣我們的財產而可能會產生的損失負責。而在扣除所有必要開支（如償還債項，支付殮葬禮儀和辦理遺產承辦所需的費用及繳納政府稅項等）後，我們的受託人將會以信託形式持有我們的剩餘財產作如下安排。”

16.Clauses 7 to 9 then directed the executrix to make various donations to charities or for charitable purposes as designated from the residual estate (剩餘財產) of the Deceased and Madam Ng upon their death.

17.Clause 10 empowered the executrix to appoint others including professionals to execute the Joint Will.

18.Finally, Clause 11 provided :

“我們謹此聲明，我們的所有兒女子孫，均在我們在生時得到充足和適當的照顧。我們希望他們能自力更生，造福社會人群。因此，我們不打算在我們的剩餘財產中，餽贈任何部份給他們。我們亦希望所有兒女子孫能融洽相處，不可為我們的剩餘財產罔興訴訟爭端。”

B6. The Joint Codicil

19.The Deceased and Madam Ng made a codicil, also in Chinese, dated 8 May 2008 (“the Joint Codicil”).  The Joint Codicil supplemented and varied the Joint Will by providing, in effect, that two properties mentioned therein, namely (1) the property in Sydney, Australia, jointly held by the Deceased, Madam Ng and the 1^st defendant; and (2) the property on Bowen Road, Hong Kong, the residence of the Deceased and Madam Ng (“Bowen Residence”) held by them jointly were to be bequeathed to the 1^st defendant upon the death of the Deceased and Madam Ng.  The other testamentary dispositions made in the Joint Will remained intact.

B7. The Deceased’s “Unexecuted Wishes”

20.In July 2008, the Deceased, Madam Ng and their children (except the 2^nd plaintiff) had a family meeting to discuss the proposal for the Deceased to set up a family trust to hold, among other things, the shares in EnGro held through the Shares.

21.Then on 16 August 2008, the Deceased and Madam Ng signed a Chinese letter addressed to all their 5 children (“Parents’ Letter”). There, the Deceased and Madam Ng stated their intention to donate their assets for charitable work had been made known to the children during a family meeting in September 2004 to which the children had not expressed any objection.  The Deceased and Madam Ng referred to the 1^st plaintiff’s proposal for the shares in EnGro held respectively by AAIE, AAS, and another company be injected into a family trust.  They, however, went on to say, that their intention was to leave the majority of their assets to charitable and Buddhist organizations in Singapore, Hong Kong and Mainland China, and for the EnGro shares held through the Shares to be given to the children.  They then set out in a schedule attached to the Parents’ Letter as to the number of the Shares and shares in Engro which each of the children was to receive (“Share Distribution Schedule”). The number of shares to be received by each of the children in the Share Distribution Schedule was different from that set out in the 2006 Undertaking. They also referred to their decision to sell the commercial office building held by AAS to discharge its liabilities so that the shares to be received by the children would not be subject to any encumbrances.  They further expressed their wishes on how to deal with other matters.  Finally, they informed their children that they would be instructing solicitors to draft a DFA to reflect all their wishes and would put into effect their wishes after execution of the DFA by all the children.

22.In response to the Parents’ Letter, the 2^nd plaintiff sent a Chinese handwritten letter on behalf of all his brothers on 12 October 2008 (“Sons’ Letter”).  The sons expressed that basically they had no objection to the proposed Share Distribution Schedule relating to the Shares or the EnGro shares, but would ask their parents to consider some issues and for reasons set out therein and among other things, they proposed that the EnGro shares held through the Shares should remain as one block to be held in a family trust and that the EnGro shares held through AAS should also be dealt with at the same time.

23.Following further discussions on or about 28 October 2008, instructions were given to Messrs Hastings to draft a DFA, which would be executed by the Deceased personally in due course.  However, the DFA was never finalized or signed by the Deceased before his death on 15 November 2008.

24.At the proceedings below, the plaintiffs referred to the Deceased’s wishes as reflected in the 2006 Undertaking, the Parents’ Letter, and the discussions on 28 October 2008 in relation to the Shares and the EnGro shares as his “Unexecuted Wishes”.

B8. Probate in Hong Kong

25.As said, the Deceased died domiciled in Hong Kong on 15 November 2008.

26.On 6 May 2009, probate in respect of the Deceased’s estate was granted to the 1^st defendant, the sole executrix appointed under the Joint Will.  In the schedule of assets and liabilities filed on 27 March 2009, the Shares stated to be held on trust by the 1^st defendant and the 3^rd plaintiff for the Deceased were included as part of the Deceased’s assets.

27.An additional schedule of assets and liabilities was filed on 9 June 2011 to include 67 HSBC shares and 1 share in another company, which had been omitted from the first schedule.

28.A further additional schedule of assets and liabilities was filed on 18 March 2013 to include the collection of antiques, paintings and works of art owned by the Deceased and kept by him personally at the Bowen Residence, which had not been included in the previous schedules.

B9. Probate in Singapore

29.On 15 November 2010, the grant of probate was resealed in Singapore.  Included in the schedule of assets in Singapore were some 2.5 million shares in AAS stated to be held by the 1^st defendant as nominee for the Deceased and various pieces of art works, antiques, porcelain vases, furniture located in two properties in Singapore.

B10. Failed attempt to implement the Deceased’s Unexecuted Wishes

30.After the Deceased’s death, Madam Ng sent instructions to Messrs Hastings to prepare a draft DFA to carry out the Deceased’s Unexecuted Wishes in relation to the distribution of the Shares and the EnGro shares as expressed in the Parents’ Letter, which Messrs Hastings did.  Madam Ng and the 1^st defendant executed the DFA, which was sent to the plaintiffs for execution on 3 August 2009.  The 3 sons raised queries to which Messrs Hastings replied on 28 August 2009.  Eventually, the plaintiffs did not execute the DFA.

B11. Proceedings in Singapore

31.The 2^nd to 4^th plaintiffs then commenced proceedings in Singapore against, among others, the 1^st defendant, disputing the Deceased’s beneficial ownership of the Shares and some other shares held by the 1^st defendant.  As at to date, the proceedings in Singapore have yet to be concluded.

C. THE PROCEEDINGS BELOW

32.Separately, the plaintiffs commenced the proceedings below, seeking the court’s construction of the Joint Will, in particular, Clause 2.  As said, they contended that by virtue of Clause 2, the Joint Will governed all assets held in the name of the Deceased or by him personally, excluding assets held on trust for him.  The 1^st defendant disagreed.  She contended that on a proper construction, Clause 2 embraced all assets beneficially belonging to the Deceased, including assets held on trust for him.  The Secretary for Justice was joined on 24 April 2013 as parens patriae, in light of the interests of the charities under the Joint Will.  He adopted a neutral position and only held a watching brief in the proceedings below.

33.As said, the Judge ruled in favour of the 1^st defendant on the construction issue and further ordered the plaintiffs to pay the 1^st defendant costs.

D. CONSTRUCTION ISSUE

D1. The legal principles

34.The general principles for construing a will are well settled.  See Secretary for Justice v The Joint and Several Administrators of the Estate of Nina Wang & Ors, HCMP 853/2012, 22 February 2013, unreported, a judgment of mine, at paras 28 – 31; approved by this Court, different constituted, on appeal in CACV 44/2013, 11 April 2014, unreported, per Lam VP at para 24.  For convenience, I would repeat them below :

“28. In construing a will, the first and foremost duty of the court is to ascertain the testamentary intentions of the testator.

29. The starting point of the inquiry is to deduce the testator’s intention by giving the words of the will the meaning that they naturally bear, having regard to the contents of the will as a whole: Sammut v Manzi. It is the natural meaning of the words used by the testator that matters. For the question is not what the testator meant to do when he made his will, but what the written words he uses mean in the particular case, that is, what are the expressed intentions of the testator : Perrin v Morgan.

30. In ascertaining the testator’s intention, the court adopts a holistic approach by looking at the entire context of the will : In re Williams. The testator’s intention is to be collected from the whole will and the meaning of the will and every part of it is determined according to that intention. The court must also try to give a sensible meaning and effect to every part of a will under construction.

31. The court does not construe a will in vacuo. Instead, it construes the will of a testator according to its language in view of the surrounding circumstances known to him when he made the will : In re Williams. Evidence of the circumstances surrounding the testator at the date of his will is therefore admissible as an aid in the construction of the will. As figuratively described by James LJ in Boyes v Cook :

‘You may place yourself, so to speak, in [the testator’s] arm-chair, and to consider the circumstances by which he was surrounded when he made his will to assist you in arriving at his intention.’

32. This so-called arm-chair principle derives from the notion that the testator must have his own surrounding circumstances in mind when he made his will and used the words in his will with reference to those circumstances. So in ascertaining the meaning of the words that the testator had used in his will, the court of construction is entitled to put itself in the position of the testator, and to consider all material facts and circumstances known to the testator with reference to which he is to be taken to have used the words in the will, and then to declare what is the intention evidenced by the words used with reference to those facts and circumstances which were or ought to have been in the mind of the testator when he used those words : Allgood v Blake.”

35.Further, under section 23B(1) of the Wills Ordinance, Cap 30, if there is ambiguity, either arising from the language used in the will or the surrounding circumstances, extrinsic evidence, including evidence of the testator’s intention, may be admitted to assist in its interpretation.  However, if the words in a will fall to be construed are clear and unambiguous, no reference to extrinsic evidence in aid of construction is permissible under section 23B(1).

36.With these principles in mind, I turn to Clause 2.

D2. Construing Clause 2

37.To recap, Clause 2 provided :

“我們謹此聲明這份平安囑書將管轄及處理我們名下所有（不論在世界任何地方）的財產。”

38.Mr Ho, SC, for the plaintiffs, submitted that in its natural, plain and ordinary meaning, “名下” means “under/in the name of” somebody.  It follows that only assets under/in the name of the Deceased were covered by the Joint Will.  It does not include those held under/in the name of some of others on trust for him.  Mr Chow, SC, for the 1^st defendant submitted that the words “名下所有…的財產” are entirely apt to cover or include assets beneficially belonging to a person but held on trust for his benefit by another person.  With respect, we agree with Mr Chow.

39.As rightly accepted by the parties, “名下” is an ordinary term without any technical meaning.  It must be understood in its plain and ordinary usage in Chinese.  According to現代漢語詞典 (2012 Edition) at p 806, “名下” means “某人名義之下，指屬某人或跟某人有關”. The dictionary meaning of “名下” in its plain and ordinary Chinese usage is beyond doubt and admits no ambiguity.  When it is used in connection with assets, it means assets “belonging” (屬) to the person concerned.  It is not limited to those assets which are held under or in the name of that person alone.

40.“名下” is used in Clause 2 in the phrase “我們名下所有…財產” to describe the assets to be covered by the Joint Will.  Read with the plain and ordinary meaning of”名下” in mind, the testamentary intention as expressed in that phrase is crystal clear.  It means “all the properties belonging to us”.  It embraces all assets beneficially belonging to the Deceased and Madam Ng.

41.Such a testamentary intention of the Deceased and Madam Ng to include all the assets beneficially belonging to them in the Joint Will is also apparent from other provisions.

42.Under Clause 5, the surviving spouse is entitled, for his/her lifetime, to income derived from the “財產” of the first deceased party.  As rightly submitted by Mr Chow, no distinction is drawn between the “財產” which are held in the name of the deceased party from those held on trust for him or her.

43.Under Clause 6, upon the death of both the Deceased and Madam Ng, after deducting all the necessary expenses as mentioned therein, the executrix is entitled to hold their residue estate on trust.  The sole executrix should then carry out the testamentary dispositions of the residual estate as directed in Clauses 7 to 9.  The Deceased and Madam Ng clearly intended to dispose of all the assets belonging to them as per those directions.  Leaving out the assets held on trust for them is inconsistent with such a clear intention.

44.Significantly, under Clause 11, the Deceased and Madam Ng expressly made no provision for their children from their residual estate after their death.  If Mr Ho’s narrow construction of “名下” is correct, then all assets held on trust for the Deceased would be left out from the Joint Will.  Upon the Deceased’s death, there would be a partial intestacy in respect of those trust assets.  The children would then be entitled to share those assets in accordance with the provisions of the Intestates’ Estates Ordinance, Cap 73.  That would contradict and indeed defeat the very intention of not making provision for the children as expressed in Clause 11.

45.In support of his construction of Clause 2, Mr Ho took a number of points.  They are all rejected for the reasons stated.

46.First, Mr Ho submitted that Clause 2 is the governing clause of the Joint Will.  He placed particular reference on the words “管轄” and “處理”. He asked us to read other provisions subject to Clause 2.  In our view, Clause 2 does two things.  It first sets out in clear and express terms that the Joint Will is to cover all the assets belonging to the Deceased and Madam Ng.  It then states clearly that the Joint Will governs and deals with the testamentary disposition of all the properties belonging to them.  Clause 2 does not have any dominance over other provisions as contended.

47.Second, Mr Ho argued that the dictionary meaning of “名下” primarily means what is stated in the first sentence “某人名義之下”.  The second sentence “指屬某人或跟某人有關” is secondary.  We respectfully disagree.  We think the entire definition must be read as a whole.  Plainly, the second sentence “指屬某人或跟某人有關” explains what is meant by the first “某人名義之下”.

48.Third, Mr Ho submitted that if “名下” means “belonging”, it would be superfluous to use it when “我們所有財產” (all our properties) would suffice.  In our view, in ordinary Chinese usage, “名下” is very often used together with “所有”. “我們名下所有” is a common expression used to refer to all things which belong to the persons concerned.  We can see no superfluity in the language used.

49.Fourth, Mr Ho sought to invoke the arm-chair principle. He referred us to the surrounding circumstances leading up to the execution of the Joint Will, including in particular, the 2006 Wills, the 2006 Undertaking and the 2007 Wills.  He submitted that from these circumstances and documents, the difference between properties held by him personally and those held by somebody on trust for him must be within the Deceased’s knowledge and appreciation when he made the Joint Will.  That may well be the case.  But it does not detract from the clear and unambiguous testamentary intention as expressed by the language the Deceased used in Clause 2 to include all the assets belonging to him in the Joint Will.

50.Fifth, Mr Ho referred to the DFA partially executed by Madam Ng and the 1^st defendant in August 2009.  It came into existence after the Joint Will, which means that it is not admissible evidence for construing the Joint Will.

51.Sixth, Mr Ho tried to invoke section 23B of the Wills Ordinance by referring to the evidence pertaining to the subjective intention of the Deceased.  However, in light of our finding that there is no ambiguity in the Joint Will, these matters are not admissible for the purpose of construction.

52.Finally, Mr Ho raised various criticisms against the Judge’s reasoning in reaching the construction as she did on Clause 2.  They can be disposed of shortly.  The bulk of Mr Ho’s criticisms are premised on his narrow construction of “名下”.  His criticisms must all be rejected now that his construction falls away.

D3. Conclusion

53.For the above reasons, we hold that when properly construed by reference to its plain and ordinary meaning and in the entire context of the Joint Will, “我們名下所有…的財產” in Clause 2 includes all assets belonging to the Deceased and Madam Ng.  The Joint Will includes and covers all their assets, including those held on trust for them in somebody else’s name.  We would respectfully agree with the Judge on the construction issue.

54.We next turn to her costs order.

E. COSTS ORDER

55.Before the Judge, the plaintiffs asked that all the parties’ costs should be taxed on solicitor and own client basis and paid out of the Deceased’s estate.  The Judge repeated her view that the Deceased’s testamentary intention as expressed in Clause 2 was clear and free of ambiguity.  She identified that essential question on costs, which is whether the plaintiffs brought these proceedings for their own benefit, or the benefit of the Deceased’s estate.  She took the view that they did so for their benefit and their interests are adverse to the interests of the charities, which are the beneficiaries under the Joint Will.

56.We agree with the Judge entirely.  We can see no basis to disturb the Judge’s costs order.

F. DISPOSITIONS

57.The appeal is dismissed.

58.We make an order nisi that the plaintiffs are to pay the 1^st defendant costs on a party and party basis, to be taxed if not agreed.

Mr Ambrose Ho SC and Mr Lee Tung-ming, instructed by Messrs Fairbairn Catley Low & Kong, for the 1^st -4^th plaintiffs

Mr Anderson Chow SC, instructed by Messrs ONC Lawyers, for the 1^st defendant